Advertising Law 101 for Small Businesses

Advertising is the cornerstone of business success. If you do not advertise enough then your company and its products will remain in obscurity and eventually it will fail. However, if you use the wrong types of advertising strategies then your company can fall victim to other types of problems, including legal problems. For all of these reasons it is important to not only learn what the laws are for advertising, but to also use this information to develop a legal and effective advertising campaign.

Nothing But the Truth

The first thing that you need to understand about advertising is that it has to be truthful. While it may seem like advertisements are nothing but exaggerated claims and outright lies, there are rules that administer how far you can stretch or embellish the truth about your products or services before you break the law. Generally the rule of thumb is do not make any claims you cannot backup with evidence. This evidence can be in the form of customer testimonials, scientific studies and actual lab results.

Know Special Rules

The truth in advertising rule is applicable to every type of product and service that you can think of. However, there are a few industries that have special rules for advertising that you will need to follow if you sell products or services in these special industries. For example, credit companies have to follow special rules of disclosure in their advertisements and they have to ensure to include special signs that indicate things like they are equal opportunity lenders. 900 numbers also need to follow special rules in their advertising, such as stating that their services are for entertainment purposes only or that the people are actors, as opposed to "psychics."

Laws to Follow

There are many laws that influence how you can advertise your products and services. Not only do you have to make sure that you follow federal laws, such as the truth in advertising laws, but you also have to make sure that you are following laws established by your local and state governments as well. For example, your city may not allow you to advertise on LED signs that are carried on the back of a moving vehicle. While this practice may be approved in cities like Las Vegas, many smaller towns prohibit it.

Use of Endorsements

The use of endorsements can be trickier than you think. First of all if you compensate the endorsers in any way then you have to state this in your advertisement. You also have to disclose if the people in the advertisement are paid actors or if they are actual customers. Finally, you have to ensure that the publication of the endorsements is authorized by the customer. This authorization can be achieved by having them sign a basic release form that outlines what you will be publishing and how it will be used.

References

http://www.business.gov/business-law/advertising-law/truth-in-advertising/